January 2012 Msinga Local Municipality: Local Economic Development Strategy Urban-Econ Development Economists 37 Hunt Road, Glenwood, Durban Tel: 031-2029673 Fax: 031-2029675 Email: [email protected] Executive Summary Introduction Poverty, unemployment and inequalities within the deep rural municipality of Msinga are some of the issues that the Local Economic Development Strategy intends to address to mobilize the disadvantaged and marginalised local communities within Msinga Local Municipality. This Msinga Local Municipality Local Economic Development Strategy has been funded by the Department of Cooperative Governance and Traditional Affairs (COGTA).The local Economic Development Unit aims to stimulate and support sustainable economic development at a local level. In order to achieve this and foster a sustainable local economy, a strategy needs to be put into place, which; creates an enabling environment for local economic development practices to thrive; ‘empowers local government and relevant and involved stakeholders’, ‘induces business development’; and supports employment creation and levers in private investment’. The need for an updated and improved LED Strategy is also due to changes experienced within the municipality since the previous Economic regeneration study of 2003. Of importance is also the Small towns Rehabilitation Programme and the latest Provincial Growth and Development Strategy of 2011 which have been extensively referred to. The aim of the LED Strategy is therefore to produce a comprehensive local economic development strategy that will highlight potential areas that the Msinga Local Municipality needs to focus investment to ensure that an enabling environment for the businesses and the community within the Msinga local Municipality is created in order to provide local economic growth and development, uplift the population of Msinga and target poverty alleviation. The strategy will also assist with providing information to be used in strategic decision making processes for local economic development. An important change has been the National Framework for LED in the Republic of South Africa formulated by the Department of Provincial and Local Government in 2006 which reiterates the aim of improving the capacity of local government to ‘facilitate rapid and effective business establishment and functioning’, particularly for Small, Medium and Micro Enterprises (SMMEs) and informal trading. Key objectives are below; The objectives of the local economic development report are as follows; o To assess legislation, policies and strategies relevant to local economic development in Msinga Local Municipality and alignment with government programmes, o To assess the existing institutional capacity (municipal capacity assessment)regarding effective Local Economic Development implementation in Msinga, o To undertake a desktop study to produce a situational analysis for the Msinga Local Municipality to understand the current dynamics with regard to the social, physical and environmental aspects, o To undertake a comprehensive economic analysis of the municipality focussing on sector performance and market conditions, o Undertake a S.W.O.T analysis, o To develop a participatory approach to Local Economic Development in Msinga, o To formulate a detailed economic vision, goals and strategies for LED in Msinga o To formulate appropriate programmes and projects o To formulate prioritization principles for projects identified o To prioritize interventions/projects o To formulate an implementation plan o To provide a monitoring and evaluation tool for each project. Methodology/Consultation Process This LED Strategy uses both qualitative and quantitative data to analyse Msinga Local Municipality and the socio-economic status of the population in order to inform the Local Economic Development Strategy. ii | Page Msinga L o c a l M u n i c i pality LED Strategy Qualitative data takes the form of extensive consultation workshops, steering committee meetings and interviews with key stakeholders. Quantitative data takes the form of business sector, informal sector and household and consumer surveys of specific areas. Data collection is detailed as follows. Primary Sources of Information Primary sources of information that are relevant for this report were collected as follows; o Participatory planning workshops: Two workshops were held within Msinga Local Municipality with the purpose of gaining in-depth knowledge and information regarding local economic development within Msinga Local Municipality, . The first of the two workshops was held on 8 July 2011 attended by government officials and local stakeholders where a presentation was made to the stakeholders in order to prompt future discussion on imperative issues relating to the situational analysis and business environment. The second workshop was held on 2 September 2011 at the Msinga Library attended by government officials. The purpose was to workshop the strategic framework including the economic vision, goals, principles and approach as well as open discussion for consensus of projects that are of importance. o Project Steering Committee meetings: An inception meeting was held on 8th June 2011. Two steering committee meetings have been held on dates 11 August 2011 and 6 October 2011 respectively with minutes circulated afterward. o Key informants and stakeholders: The keys informants chosen for the workshops and interviews are municipal officials related to local economic development within Msinga Local Municipality, various Government Departments such as Department of Cooperative Governance and Traditional Affairs, Department of Economic Development and Tourism, Department of Rural Development, Department of Agriculture which have undertaken projects in Msinga, NGO’s such as Church Agricultural Projects (CAP) who have been mobilising development for sectors and other stakeholders which have been involved in research regarding Msinga and consultancies involved in strategy formulation for various development components for Msinga. Therefore the focus group identified have only been people who are familiar with Msinga and its dynamic’s and who represent the needs of Msinga in order to gain an in-depth ‘grass roots’ understanding of the status quo of Msinga Municipality. o Semi-structured and informal interviews were conducted either through electronic (internet and telephonically) means and face to face interviews The aim of utilizing numerous key informants and stakeholders helps devise a holistic contextual understanding and differentiated view of the municipality in order to produce a strategy that is all-inclusive. The aim is also to gain feedback and further research ideas and possibilities. o Statistics: Updated statistics obtained from Quantec till the year 2010 have been used to interpret and analyse data for Msinga Local Municipality. o Observation: Observation was undertaken through site visits, use of photos as well as Google Earth. o Structured Surveys: Questionnaires were drawn up for the business and informal sectors as well as a household and consumer survey. These surveys were structured to gain an understanding of Msinga and not for in-depth statistical data analysis. They were carried out in the major nodes of Pomeroy, Tugela Ferry and Keates Drift The surveys aimed at investigating the problems, challenges and development opportunities faced by Informal traders, Households, Consumers as well as SMMEs around Msinga Municipality to determine the development potential and problems related to Msinga’s economic activities. The survey further intends to find out what the Municipality can do to help overcome the challenges faced, and to improve the business environment. o Site Visit: Undertaken for observation purposes in order to gain a broad understanding of the area, and to collect pictorial evidence. iii | Page Msinga L o c a l M u n i c i pality LED Strategy Secondary Sources of information o A desktop study of various legislation, policies and strategies as well as the socio economic review has been undertaken through usage of previous LED plans for uMzinyathi District Municipality, Integrated Development Plans (both local and district), and other studies undertaken for the municipality for example: research projects by NGOs, academic research and various other research found relating to Msinga Local Municipality. Main Components of the LED Strategy The main findings are the key issues which need attention and which need to be addressed in Msinga. The issues are broken down into the respective categories. They will therefore be presented for purposes of this executive summary, in relation to the goals, strategies and programmes formulated. The key programmes and projects all have employment and job creation potential and the potential to foster skills enhancement. The strategy formulated encompasses specify goals, strategies, programmes and projects which are based on the findings of the situational analysis and the key issues identified. The tables below summarises the key goals, strategies, programmes formulated as the LED Strategy. Goals Strategies Programmes Goal 1: Enhance the key Strategy 1.1: Ensure sustainable Programme 1.1.1: Improve and enhance the irrigation sectors identified to agricultural practices and schemes broaden the economic base enhance the agricultural sector Programme 1.1.2: Enhancing Agricultural Practice throughout of Msinga Msinga Programme 1.1.3: Develop the Agriprocessing Sector Programme 1.1.4: Develop Agricultural